Drivers without no fault insurance may face challenges dealing with other drivers’ insurance companies after a collision. Often, this hassle is futile, with claims disputed or dismissed entirely. Ultimately it results in having to cover expenses out of pocket. No fault insurance, on the other hand, provides immediate financial cover after a car accident.
The only drawback of this plan is that it limits policyholders’ right to sue for damages. Still, it is an essential coverage option, especially in locations where a no-fault plan is compulsory. Here, we’ll unravel this coverage, how it works, and what it entails.
What is a no fault insurance?
No fault insurance is an additional policy providing benefits for drivers and their passengers involved in accidents. It is also called personal injury protection (PIP). This plan covers the medical expenses of drivers and passengers up to their policy limits.
Over a dozen states require drivers to have this insurance. These no-fault states include New Jersey, Florida, North Dakota, Kentucky, New York, Utah, Hawaii, Pennsylvania, Massachusetts, Kansas, Minnesota, and Puerto Rico.
In three of these states, drivers can opt for alternative plans like Med Pay. Personal injury protection is still required even in at-fault states like Oregon and Delaware.
How does no fault insurance work?
If you get into an accident with another driver in a no-fault state, both of you will file claims to your respective insurers. This often results in quick processing of claims.
This plan stands out from at-fault plans because insurers cover bills regardless of the driver at fault. In other words, if your vehicle gets involved in an accident, the question of who caused the crash will not arise. Whatever the case, insurers will step in to cover the medical bills for you and your passengers.
As always, the payout amount will be the balance after you have spent your deductible. In some states, there are limits to benefits insurers can provide. Even though this plan restricts lawsuits, you can still push for one if death or serious injuries are involved.
Insurers consider your gender, age, marital status, vehicle details, and, most importantly, your driving record to decide on a premium.
What is covered in no fault insurance?
Coverage features on this plan vary with policy providers and plans you opt for. However, there are still standard provisions no fault insurance caters to, including:
- Medical expenses
- Survivor benefits
- Lost wages
- Housekeeping and childcare expenses
Benefits of no fault insurance
Reduced fraud
Being a policyholder essentially takes away your right to sue, except in dire situations. That said, the plan will not provide for liability or fault in your claim. You may not gain from padded claims and staged accidents because nobody sues anybody.
Low premiums
It is easy to opt for no-fault insurance because they are not expensive. Because insurers have no reason to deal with litigation costs, they have a reason to reduce premium rates.
Faster claim processing
Drivers have to file claims to their insurers who process and respond quickly. Additionally, payouts come faster than usual because there’s no need to determine who is at fault.
Medical expenses
With this plan, you only have to meet your deductible and leave the rest of your medical bills to insurers. They cover the cost of treatment for both drivers and their passengers after an accident,
Income support
Serious injuries you sustain from accidents may take a while to heal. This may cause you to take a break from work. Your policy ensures you get lost wages and benefits if such cases occur.
Conclusion
In conclusion, no fault insurance is a supplemental plan that does not replace the need for complete auto coverage. Therefore, considering a proper plan for additional benefits is still essential.
